Money in the Details

This Article, ‘Money in the Details,’ will help build your understanding of money, assist you in understanding assets, Liabilities, and Net Worth.

And will provide the required financial education you need to start working on achieving financial freedom.

From my book “MONEY IN THE DETAILS”, you will learn more about setting financial goals, financial literacy, debt, tax, budgeting, budget management, emotional intelligence, financial statements, and cash flow. https://inspiredbysephjoe.com

Money in the details explain three major topics in Finance, that will help understand money in detail. Move you from a lower income earner or a middle class in the society to building true wealth. The wealthy in the society are not wealthy just because they make more money more than you.

They are wealthy because they spend less than you,

The are financially responsible,

They have the right appetite to take better risks in investment than you,

They clearly differentiate between Assets, Liabilitiesy and Networth.

The poorest in society use their money to buy stuff, the middle class buys liabilities, while the wealthy buy assets.

Once in an interview, African richest man Aliko Dangote said that the most expenses purchase in his life was his private jet that cost fifty million dollars. At the time his net-worth was twenty five billion dollars, now let break it down (his net-worth 25 billion dollars and 1% of his total net-worth is 250 million dollar and his most expensive non assert purchase is 50 million dollars, in other words his most expenses purchase is just 0.20% of his total net-worth) and the same man has a factory that is worth over 7 billion dollars, this goes to show that wealthy people buys assets and not liabilities.

Now, my question is, what percentage of your total network is your most expensive non-asset purchase?

Before you start saying the current house you are leaving is an asset, let’s first understand what assets, liabilities, and net worth really mean and how they make the wealthy wealthy and always keep them at the top.

ASSETS: There are a lot of definitions of what an asset means, and sometimes this definition can lead to the wrong knowledge of an asset. Over the years, many homeowners and car owners thought that their houses and cars were assets.

Robert Kiyosaki simply said assets are anything that puts money in your pocket.

So, if you have a house and you are collecting rent on your property, then the house is an asset; anything outside of this is just a liability that can be converted to an asset.

If you have a car and it’s being used for taxi or Uber, then you have an asset; anything outside of this is just a liability that can be converted into assets.

A good asset is the representation of your monetary value; it puts money into your pocket as a direct or passive income. In identifying your assets, there are two questions you need to ask yourself. learn more from money in the details

1 Does the item have monetary value? If yes, then you are halfway to gaining an asset. (now monetary value is in the selling, not purchase, if it costs you $100 to buy and after one month you can’t sell for $20, then it has no monetary value) That is just you buying stuff.

2. Can the item make me money with or without my physically being present? If yes, then you have an asset.

But if the item only has the first one without the second one, then it’s a liability that can be converted into an asset, but if it only has the second question without the first, then it’s a passive income generation or side hustle.

Understanding your assets, how to increase the value of your assert, and how to buy more assets than liabilities is one of the most defining moments in your goal to achieve financial freedom, and this is what the book Money in the Details will provide you.

LIABILITY: Liability is anything that takes money away from your pocket, if you’re living in your own house and you pay bills on the house, pay property tax on the house, and you are not making any rental income from the house, then that house is a liability, not an asset.

If you also have your personal car that you have to fuel and maintain, then it’s a liability, not an asset. You may want to say that you have a house so you don’t pay rent, or you have a car so you don’t spend on transportation, what you have done is to exchange basic liabilities for servicing liabilities. The advantage your house and car have over renting or transportation is that they can be converted into assets.

But the bad kind of liability is buying stuff that later has no monetary value; that is how we develop habits that fund poverty. Please also know that liabilities are things we also need, but the lesson here is to always increase your assets while reducing your liabilities.

Before you buy any high percentage liability over 5% of your net worth, make sure you have added 20% to your assets.

The other side of liability is understanding your personal value creation and value consumption, and learn how to increase value creation while reducing value consumption.

Please read more about financial intelligence in my book Money in the Details.

NET-WORTH: Your net worth is your assets subtraction of your liabilities; when you take away what you owe to others from what you have, what you have left is  your net worth; this is your total monetary value without liabilities.

Or as the YouTuber Nischa puts it in her video about financial literacy, assets minus liabilities is = net-worth. She went farther to say income buys you your lifestyle, while networth buys you freedom.

If you want to be wealthy or want to achieve financial freedom, invest in yourself, save, invest, reduce your liabilities, and increase your assets.

Every financial decision or purchase you make today is either building your assets or building your liabilities. understand how to build your net worth from the book Money in the Details

Read more on financial intelligence and financial literacy in my book “MONEY IN THE DETAILS.” You will learn more about setting financial goals, financial literacy, debt, tax, budgeting and budget management, emotional intelligence, financial statement, asserts, liability, cash-flow, and net worth. https://inspiredbysephjoe.com, https://whatsapp.com/channel/0029Vb6EaPm90x2o9XSfIq1e